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5.2. Treatment of Foreign Profits / Losses

Pursuant to the prevailing territorial system, business income derived through an establishment abroad is excluded from the tax base. Foreign-source passive income including dividends, royalties and interest received by a resident company are subject to tax in Cameroon. However, dividends received from qualifying subsidiaries resident in a CEMAC Member State are subject to tax in Cameroon for 10% of their amount only, the remaining 90% being exempt under the participation exemption regime. In order to qualify for the partial exemption, the parent must have held at least 25% in the capital of the CEMAC subsidiary for at least 2 years. From 2014, capital gains on the disposal of the shares of a legal person entitled to prospection, exploration or exploitation rights to natural resources situated in Cameroon are deemed to be Cameroonian source and are assessed to tax in Cameroon.